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Digitized by the Internet Archive 

in 2012 with funding from 

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http://archive.org/details/oralhistoryoftenOOhatc 



ORAL HISTORY OF THE TENNESSEE VALLEY AUTHORITY 

INTERVIEWS WITH KENNETH D. HATCHER 

AUGUST 5/ 1974 



BY CHARLES W. CRAWFORD 

TRANSCRIBER - BETTY WILLIAMS 

ORAL HISTORY RESEARCH OFFICE 

MEMPHIS STATE UNIVERSITY 



MEMPHIS STATE UNIVERSITY 
ORAL HISTORY RESEARCH OFFICE 

I hereby release all right, title, or interest in and to all 
of my tape-recorded memoirs to the Mississippi Valley Archives of 
the John U'illard Brister Library of Memphis State University and 
declare that they may be used without any restriction whatsoever 
and may be copyrighted and published by the said Archives, which 
also may assign said copyright and publication rights to serious 
research scholars- 



PL^iCE 



D. 




ate Mj&dlX i 1~MmjM 



•J 




(JArtervieivee) 




(For the Mississippi V/lley Archives 
of the John V.'illard Brister Library 
of Memphis State University) 



(OHRC Form B) 



THIS THE ORAL HISTORY RESEARCH OFFICE OF MEMPHIS STATE 
UNIVERSITY. THIS PROJECT IS "AN ORAL HISTORY OF THE 
TENNESSEE VALLEY AUTHORITY." THE PLACE IS KNOXVILLE, 
TENNESSEE. THE DATE IS AUGUST 5, 1974. THE INTERVIEW IS 
WITH MR. KENNETH D. HATCHER FORMERLY OF THE TENNESSEE VALLEY 
AUTHORITY. THE INTERVIEW IS BY DR. CHARLES W. CRAWFORD, 
DIRECTOR OF THE MEMPHIS STATE ORAL HISTORY RESEARCH OFFICE. 
TRANSCRIBED BY BETTY WILLIAMS. INTERVIEW #1. 

DR. CRAWFORD: Mr. Hatcher/ I suggest we start by 

getting some background of a bio- 
graphical nature about you. you might/ as far as you care to 
and in as much detail/ give some information about your life 
from the time that you were born to the time that you became 
associated with TVA in 1941. You might start with something 
about your time and place of birth and your family and go 
through education and experience prior to 1941. 

MR. HATCHER: _ , .__„ . _ __ „ 

I was born in 1914 in Jefferson County/ 

Tennessee/ which is the adjacent county 

to Knox County. My parents were George Bert Hatcher and Sally 

Thrasher Hatcher. When I was slightly less than three, my 

family moved to Knoxville and I was educated in Knoxville 

public school system, graduating from old Knoxville High School 

in 1931. My boyhood ambition had been to be a civil engineer. 

Graduating though at the height of the Great Depression, this 



ambition was somewhat thwarted. Immediately upon graduation 
I entered a business college here in Knoxville and graduating 
from that I found employment at a large knitting mill in 
Knoxville and worked in the office there for nine and one half 
years/ rising to a position where I scheduled production and 
assisted in tracing orders from custom made knit goods through 
the manufacturing process. I came to work for TVA in October 
of 1941 in a clerical position. In June 1942, I left TVA 
temporarily to go into military service. I served in the 
Army Finance Corps during World War II from June, 1942/ through 
February of 1946. 

Returning to Knoxville in 1946/ I resumed my TVA employment 
in the Division of Finance and worked in a salaried position 
as clerk until September of that year when I entered the 
University of Tennessee, matriculating in the College of 
Business Administration/ from which I graduated in the Class 
of 1949 with highest honors. I resumed my employment in the 
Internal Audit Section of the Finance Division of TVA in 
January of 1950. My work in the Internal Audit Section con- 
tinued for some five years. In November of 1954, I was 
transferred to the Plant Accounting Branch of the Division 
of Finance which is located in Chattanooga. I was employed 
there for some five years/ returning in November of 1959 to 
Knoxville where I was a staff accountant on the Comptroller's 
Staff. After about two years I was named Assistant to the 
Comptroller for Technical Matters. This work included the 
responsibility for account classifications/ accounting 



reports/ and accounting procedures for the division. I 
remained in this position until April of 1971 when I became 
Comptroller. I remained in that position until my retirement 
in April of 1974. 

From this background it is apparent that my decision- 
making role was in the Division of Finance in TVA were some- 
what delayed until perhaps 1956 and thereafter when I had any 
part in management decisions and fiscal policy. 
DR. CRAWFORD: Let's get a little more information of 

a background nature. What sort of 
experience did you get/ Mr. Hatcher/ in the Army Finance Corps? 
MR. HATCHER: I attended the basic enlisted men's 

training at Fort Benjamin Harrison. I 
had the regular enlisted man's Army Finance work there and upon 
completion of that in September of 1942 I was transferred to 
the Second Armored Division which happened to be at Fort Bragg/ 
North Carolina/ at that particular time. Joining them there I 
was with the Second Armored until it departed for overseas 
duty. Because of my extreme myopis (nearsightedness) I was 
not permitted to go overseas/ but remained at Fort Bragg and 
was assigned to the Post Finance Office at Fort Bragg. In 
April of 1943 I was sent to the Advanced Army Finance School 
at Wake Forest College. I completed that thirteen-week course 
of Advanced Army Finance School and returned to the Post 
Finance Office at Fort Bragg. I rose to the rank of Staff 
Sergent there and was in charge of the Auditing Section of the 
Post Finance duties. It was my duty to be responsible for the 



section that examined prior to payment all voucher disburse- 
ments and to approve those vouchers before the check for their 
payment were written. 
DR. CRAWFORD: Why/ before that time/ had you decided 

to leave private employment and join 
TVA? 
MR. HATCHER: Since I was a native East Tennessean 

and here at the very beginning of TVA 
I had always had a very healthy curiosity about TVA and an 
interest in what it was doing. I came from a long line of 
rather independent East Tennessee Republican stock and there 
was some disagreement/ I think/ with the concept which a 
Democratic administration had followed in setting up an organi- 
zation which was in some opinions in conflict with private 
enterprise. I guess more than any other reason for me seeking 
employment in TVA was to improve my own position financially. 
It is quite trite and common to talk about how the salary 
levels were during the Depression but the $105.00 a month's 
salary when I had begun employment with TVA was quite a bit 
more than the salary that I was receiving after 9 1/2 years 
at the large textile manufacturing company that I had mentioned 
earlier. 

DR. CRAWFORD: In 1941 that was a very respectable wage 

MR. HATCHER: (Laughter) Yes, it was. 

DR. CRAWFORD: How much work did you have time to do 

with TVA before you left for military 
service? 



MR. HATCHER: My work was almost entirely clerical 

work. I begun as a underfile clerk in 
Payroll Audit Section of the Division of Finance. For about 
the first three months I worked entirely in the employment 
files — individual file folders being set up for each individual 
employee in TVA. Incidentally/ this was the period of TVA's 
highest employment. At one time during this period some 40/000 
employees were employed at TVA. For payroll loaded purposes 
these files were maintained for each of these employees and my 
early duties at TVA was to be one of those that maintained those 
files. I was promoted from that file unit to what was called 
the Addressograph Unit. Metal embossed plates were prepared 
containing the information for preparing payrolls. These 
embossed tapes served as an audit base for verifying the accuracy 
of rolls. Information once embossed did not have to be repeatedly 
checked. But each week as long as that information was not 
changed by a transaction form the embossed information was 
accepted as having been verified previously for audit purposes. 
DR. CRAWFORD: Then when you had changes you had to 

reemboss? 
MR. HATCHER: This is correct. Then the changes then 

were again audited and verified and once 
having been verified that process did not have to be repeated 
as long as the information did not change again. 
DR. CRAWFORD: How many months were you with TVA be- 

fore you left for the service? 



MR. HATCHER: About seven and a half I believe. 

DR. CRAWFORD: Did you at any time have any doubts 

about returning to TVA after the war 
was over? 
MR. HATCHER: I think not. I did give some thought 

during my time in the service to acquir- 
ing a college education. I had given considerable thought to 
how I might do this and at the same time continue my employment 
with TVA. But I think I always even when I returned to college-- 
while I was going to college — I don't think there was a great 
deal of doubt in my mind that I wanted to return to TVA employ- 
ment after I had gotten my college education. 
DR. CRAWFORD: Did you leave TVA employment when you 

went to the University of Tennessee? 
MR. HATCHER: I continued to work on a part-time basis 

for TVA on an hourly basis until the 
budget crisis of June/ 1948. At that time I was terminated for 
a period of about six months and I was reemployed on an hourly 
basis in January/ 1949. Although the number of hours employment 
were much fewer from that time on I did remain on the hourly 
payroll until I came back to the annual position in January/ 
1950. 
DR. CRAWFORD: You mentioned the large number of 

employees in 1941 and 1942. Was that 
because of the rush construction job? 
MR. HATCHER: Yes, it was. I don't recall the exact 



breakdown of the number of hourly and the number of annual 
employees at this time/ but I can say fairly/ I think/ that a 
large majority of those 40/000 employees were hourly construc- 
tion employees. TVA did have a crash construction program at 
that time to produce the generating capacity to produce the 
aluminum that was sorely needed in the war efforts. 
DR. CRAWFORD: Do you know when that program had 

started? Was it before December of 
1941? 
MR. HATCHER: Yes ; there was a beginning of the set 

up of generating capacity construction 
which dated back/ I suppose/ to some time in 1939. The critical 
shortage of electrical energy that was needed for an all out 
war effort was foreseen by many people both in and out of TVA. 
The need of larger generating capacity was anticipated and 
some effort had been stepped up. There was a critical change 
of course/ when our country actually declared war in December 
of 1941/ but some of the projects which politically had been 
delayed were immediately opened up in December of 1941. Notably/ 
the Douglas Dam project. 

DR. CRAWFORD: So you entered TVA at a very busy time? 

MR. HATCHER: That's correct. 

DR. CRAWFORD: Did you do your work at the University 

of Tennessee then with the intention of 
returning to TVA? 
MR. HATCHER: Yes, I don't believe that the thought 

of permanently leaving TVA was ever 



8 



seriously entertained. 

DR. CRAWFORD: Did you make any great changes in your 

life when you went back to school? Did 

you live at the same place you were already living in Knoxville? 

MR. HATCHER: This is correct. I might say parenthet- 

ically that my wife made considerable 

economic sacrifices in order that I could go back to college/ 

and without the GI Bill of Rights which permitted full scholar- 
ship payment I doubt that I ever would have had an opportunity 

for a college education. 

DR. CRAWFORD: I think the value of that bill has 

certainly been proven. I am sure they 

have recovered more than the cost of it in increased taxes — 

paid by people such as yourself through earnings that have 

vastly increased as a result of it. 

MR. HATCHER: There is no doubt in my mind that the 

educational benefits of the popularly 

called GI Bill of Rights was the greatest benefit veterans 

derived from the GI Bill. 

DR. CRAWFORD: Your part-time work for TVA was done 

at night I suppose or when it didn't 

interfere with classes? 

MR. HATCHER: I was able to schedule my classes so 

that I could either work for TVA during 

the morning hours from 8 to 12 or work during the afternoon 

hours from 12 to 4:45. 



DR. CRAWFORD: You still graduated rather quickly I 

believe/ from about 1946 to '49, wasn't 
it? 
MR. HATCHER: Yes, I was able to have credited some 

of the hours I had attended the advanced 
Army Finance School at Wake Forest College and I also by pre- 
entrance examinations was exempted and received credits for some 
courses — freshman English composition being one of them. 
DR. CRAWFORD: So you were able to complete your 

education in fairly quick order and 
get back to TVA. What was the budget crisis of June, 1948, Mr. 
Hatcher? 
MR. HATCHER: I am not sure that I am aware of all 

the aspects of that budget crisis, but 
1948, as you will remember, was an election year and there was 
quite a demand that the large governmental expenditures which 
had been brought about by the war effort should be drastically 
reduced and President Truman moved to drastically reduce the 
government expenditures. TVA ' s appropriations budget was 
reduced drastically. I don't know the figures, but a great 
many of TVA employees found themselves in the reduction of 
force at that time. Indeed, all temporary or part-time 
employees were eliminated from the payroll in TVA at that time. 
DR. CRAWFORD: That was one of the ways of economizing. 

MR. HATCHER: This is true. 

DR. CRAWFORD: When did this reduction in force end? 

MR. HATCHER: At June 3rd, 1948, it was implemented 



10 



and continued on for possibly several 
fiscal years. Indeed/ I was one of the few of those who return- 
ed later to TVA employment. Most of those persons who left TVA 
employment never returned to TVA employment. 
DR. CRAWFORD: Did you leave the TYA's employment roll 

when you went back to school? You were 
not carried as an employee during that time? 

MR. HATCHER: Yes/ I was carried as a temporary, part- 

time hourly employee. 
DR. CRAWFORD: Did you have the understanding that you 

would return to TVA? 
MR. HATCHER: There was no definite committment 

either on my part or on the part of 
TVA that I would return. There was an implicit understanding 
I think/ both on my part and then the part of my supervisors in 
TVA/ that if conditions permitted and vacancies existed that I 
certainly would be given top consideration for those vacancies. 
DR. CRAWFORD: It is fortunate then that the budget 

crisis had started fading by that time. 
MR. HATCHER: It was indeed. There was a little 

anxiety on my part though. I graduated 
in December of 1949 and it was some time toward the end of 
January before I was assured that I would have TVA employment 
and it came about through the resignation of one of the employees 
in the Internal Audit Section which created the vacancy. Had 
that vacancy not been created I might have had further delay in 
my coming back to TVA. 



11 



DR. CRAWFORD: As it was, you were able to start 

promptly. 
MR. HATCHER: Yes/ after only about three weeks of 

idleness. That was in December and 
that was a welcome vacation. 
DR. CRAWFORD: I would think after having gone through 

the war and your degree that you didn't 
mind a vacation. What were your duties when you returned to 
TVA in the Internal Audit Section of the Finance Department? 
MR. HATCHER: I operated very much as a junior accountant 

would in a public accounting firm. I did 
routine audits of payroll operations and vouchering operations 
and account classification coding and things of that sort for 
a period of perhaps a year. Then my responsibilities were in- 
creased and I became responsible for developing audit programs 
for various transactions. Then after about another six months 
I was responsible for the work some four to six auditors working 
underneath me and was in charge of field site audits of construc- 
tion activities in various TVA program operations. 
DR. CRAWFORD: Did you travel much for the field type 

audits? 
MR. HATCHER: Yes/ at least 75% of the time I would 

estimate was spent traveling outside 
my official station which was Knoxville. 
DR. CRAWFORD: You went to the dam and by that time, 



I guess, the steam plant construction 



12 



sites/ didn't you? 

MR. HATCHER: That is right. Johnsonville Steam 

Plant/ TVA's first large steam plant/ 
was well under way in construction in 1950 and several other 
large projects were in various stages of construction. The 
Shawnee Steam Plant was just beginning to be started. Widow's 
Creek Steam Plant was not far behind and it was TVA's fiscal 
policy at that time to establish an accounting office at each 
of the major construction projects — a policy which has since 
been changed. 

DR. CRAWFORD: You visited the accounting office on 

the site then? 
MR. HATCHER: That is correct. 

DR. CRAWFORD: Were your trips scheduled or announced? * 

MR. HATCHER: They were scheduled/ but the schedule 

was that an internal audit record was 
not announced to the audit offices which were to be visited. 
The audit visits to those offices were unannounced. 
DR. CRAWFORD: How long did you usually stay when you 

were on a field trip? 
MR. HATCHER: This depended upon the volume of the 

transactions of that particular account- 
ing office. The large construction projects such as a major 
steam plant usually required a team of four to five auditors 
and a period of three to four weeks. 
DR. CRAWFORD: Did you return to Knoxville on week-ends? 



13 



MR. HATCHER: That changed back and forth, depending 

upon the distance from Knoxville. If 
we were within a hundred and twenty to hundred and fifty miles 
we would return on week-ends. At distances greater than that 
from Knoxville, the economics of travel required that we would 
remain at our audit sites over the week-end. We returned only 
at the completion of the project. 
DR. CRAWFORD: Who was in charge of the Finance 

Department when you went there? 
MR. HATCHER: Mr. Arnold Sunstrom was the comptroller 

at the time. I came in '41 and he 
continued as Comptroller until after I had returned in the 
Internal Audit Section in 1950. He left sometime in 1951 and 
was succeeded by Mr. Gilford Cruze whom I succeeded as Comptroller 
DR. CRAWFORD: Did your construction program start 

slowing down in the fifties and you had 
to make fewer of these trips after a while? 
MR. HATCHER: Well, it is hard for me to put a date 

on that. Actually I was transferred 
from the Internal Audit Section to the Planned Accounting 
Branch in the latter part of 1954. The construction program 
is still going along at a pretty good clip at that time. 
Quite a backlog had accumulated in the Planned Accounting 
Branch there. One of the principal functions of Planned 
Accounting Branch is converting the construction accounting 
records into units of property for continuing plant purposes. 



14 



Some of the steam plant projects which had been completed/ 

such as Johnsonville/ Shawnee/ and Widow's Creek presented a 

tremendous backlog of unitization work for the Planned 

Accounting Branch/ especially since they had had very little 

experience in dealing with machinery of the size that these 

new plants incorporated. 

DR. CRAWFORD: How did you handle that matter? 

MR. HATCHER: I'm afraid that it would be erroneous 

to say that I personally handled it. I 
assisted the chief of the Planned Accounting Branch and more in 
the routine accounting procedures of that branch/ I think/ free- 
ing his time up somewhat so that he could work with the engineer- 
ing units of the branch to make some progress on the unitization 
backlog. The matter of the delineating the property units and 
the retirement units that went into those property units and 
the significance of major and minor items that composed the 
property units was largely an engineering matter and it was 
done in cooperation with the engineering units of the Office 
of Power after considerable discussion with the Federal Power 
Commission and private companies who had had some work in this 
area. 

DR. CRAWFORD: Why had a backlog accumulated? 

MR. HATCHER: Well/ I think it was due largely to 

the crash construction program. You 
must recall that early in the fifties we were in the Korean 
Conflict and the insatiable appetite for electric energy was 



15 



still not satisfied. I think it is interesting that there is 
some correspondence in the Division of Finance files from some 
of the earlier comptrollers dated somewhere about 1947 which 
envisioned the end of TVA's construction program because we 
had now reached what was believed to be an operating level. 
Our accounting thrust very shortly changed from largely 
construction oriented matter of accounting to an operating 
oriented phase of accounting. This of course/ had some signifi- 
cance in our depreciation policies. I think it is interesting 
that these managers thought that we had reached a somewhat 
status quo. In fact/ the opposite was true. In the early 
fifties our construction again took off on a rising curve and 
the demand for electrical energy is still [high and] has not 
been satisfied in 1974. I believe it is valid to say that we 
now have under construction in TVA larger number of kilowatts 
of power capacity than at any time during TVA's earlier history 
with the nuclear plants. 
DR. CRAWFORD: Well/ haven't many of the estimates 

consistently been low about TVA's growth? 
MR. HATCHER: This is correct. TVA's estimates of 

growth were at first derided by a number 
of private power people as being unreasonably high/ but in fact 
TVA's estimates have turned out to be short of what the actual 
demand was. 
DR. CRAWFORD: I think that has been true all the way 

through from the 1930's. 



16 



MR. HATCHER: I think that is right. But the criticism 

hasn't completely subsided. Even today 
there are those advocates who say that the electrical energy 
demand is subsiding and particularly with respect to the environ- 
mental concerns we have today that the electrical energy con- 
sumption will be reduced and that we in fact could start cutting 
back on our generating capacities — construction of larger 
generating capacities could be curtailed. Perhaps there is 
some validity in this. But certainly TVA ' s experience in 
history would indicate that the demand for electrical energy 
will continue to grow. 
DR. CRAWFORD: Well/ certainly from the beginning to 

the present time the demand for electrical 
power has steadily increased in the TVA area. If a change is 
due it hasn't appeared yet. 
MR. HATCHER: This is correct. I believe that there 

have been some declines in the rate of 
growth. Growth is continuing as it is in electric utilities 
throughout the country. TVA is not unique in this growth 
although TVA's growth rates are probably higher than the average 
growth rate. 
DR. CRAWFORD: You had a major change in your career 

in/ I believe/ 1954. This was the one 
that involved your leaving Knoxville and moving to Chattanooga. 
How did that happen? Why did you take that position? 
MR. HATCHER: This was a promotion. I believe I have 

mentioned earlier that I estimated that 



17 



I was away from home about 75% of the time. Most of us grow 

tired when we are away from home and traveling after some period 

of time. It was the desire to spend my nights at home that 

lead me to seek a different employment than the Division of 

Finance. Of course/ I had some ambition of progressing in the 

Division and this was a promotion. I was named the assistant 

to the Chief of the Planned Accounting Branch when I made that 

move to Chattanooga. 

DR. CRAWFORD: Who was the Chief of the Branch? 

MR. HATCHER: Mr. Lester L. Laughlin. 

DR. CRAWFORD: What were the duties of the Planned 

Accounting Branch? 
MR. HATCHER: The Planned Accounting Branch as I 

indicated summarily earlier converted 
the construction accounting records to continuing units of 
property. These records served as a basis for depreciation 
purposes and the Planned Accounting Branch maintained the 
depreciation analysis ledgers and prepared the monthly journal 
entries which recorded the depreciation to be charged to each 
of TVA * s various programs. When units of property were changed 
those continuing unit records determined whether the change 
would qualify the plant change. That is/ whether there would 
be an addition to plant or retirement from plant or whether 
the change would simply be recorded as a maintenance expense. 
DR. CRAWFORD: So you had to convert what you had on 

a temporary basis during construction 
to a permanent situation. 



18 



MR. HATCHER: This is correct. Practically all the 

transactions which took place during 
construction period were capitalized — they were included as a 
part of cost of the plant. But once the plant went into 
commercial operation/ depreciation started and changes in the 
plant from that time forward had to be examined to see actually 
whether they were maintenance expenses or whether they did 
qualify for plant changes. 
DR. CRAWFORD: What guidelines did you have to follow 

in making those determinations? 
MR. HATCHER: The Federal Power Commission of course, 

has issued a uniform system of accounts 
for electric utilities and those set forth some guidelines that 
can be followed. These were expanded upon somewhat in TVA ' s 
actual practice. More detail was found in TVA's plant records 
than was actually required for Federal Power Commission purposes 



DR. CRAWFORD: 

Power Commission? 
MR. HATCHER: 



Was TVA in any way under the control 
for reporting purposes of the Federal 



NO/ not actually under their control. 

The TVA Act requires that TVA shall 
account for its power activities in accordance with an account- 
ing system if such a system is prepared by the Federal Power 
System. At the time that the TVA Act was written there was no 
such system. The system was propagated in 1936. TVA is 
responsible that its power accounts conform to that system. 



19 



but the Federal Power Commission has no enforcement powers to 

see that TVA accounts do. 

DR. CRAWFORD: Do you consider that system adequate 

for TVA? 
MR. HATCHER: Well/ actually no. Further detail is 

required beyond what that system required 
to be effectively a management tool. TVA ' s accounts are actually 
in much greater detail than those actually required by the 
Federal Power Commission in uniform system. 
DR. CRAWFORD: Why are TVA ' s records kept in more 

detail? 
MR. HATCHER: To give the information for operating 

and management purposes so that cost 
controls can be more closely followed and corrective actions 
taken. 
DR. CRAWFORD: Where did you maintain these records 

in Chattanooga or in Knoxville? 
MR. HATCHER: The Planned Accounting records are 

maintained in Chattanooga. The operating 
records — incidentally the power operating records are also 
maintained in Chattanooga in the Power Accounting Branch located 
in that city. 
DR. CRAWFORD: Did you find it any inconvenient to have 

part of your administrative structure in 
Chattanooga and the other part in Knoxville? 
MR. HATCHER: Of course/ there are some inconveniences 

when your administrative structure is 



20 



scattered geographically. However/ I think that TVA ' s 
experience has confirmed that to locate these detailed account- 
ing records at the seat of operation where the managers of the 
operating programs are located does tend to serve the purpose 
of giving those operating managers the detailed information 
on the work a more complete and on a prompter basis. It 
facilitates their use of those records. This is done not 
only in power/ but also in our fertilizers and munitions 
operations and development in Wilson Dam/ Alabama. 
DR. CRAWFORD: How much did you have to travel in this 

work? 
MR. HATCHER: Very little. I would guess less than 

5% I have spent in travel 
DR. CRAWFORD: That was a great improvement over 75%. 

MR. HATCHER: Considerable improvement as far as my 

personal convenience was concerned. 

( Laughter ) 
DR. CRAWFORD: Had you sold your home in Knoxville when 

you moved then? 
MR. HATCHER: Actually, I did not own property in 

Knoxville prior to the time I moved 
there. I had rented. I acquired my first residence in 
Chattanooga. 
DR. CRAWFORD: Did you have any idea how long you would 

stay in Chattanooga when you went there? 
MR. HATCHER: No. 



21 



DR. CRAWFORD: Well/ you remained there, I believe/ 

until/ was it 1959? 
MR. HATCHER: Yes/ the latter part of 1959, in 

November/ I believe, of '59. And I 
might say that my leaving was quite a surprise to me. I had 
not anticipated returning to Knoxville and when the Comptroller 
apprised me of the fact that he'd like for me to return to 
Knoxville to be a part of his staff I was quite surprised. 



THIS IS THE ORAL HISTORY RESEARCH OFFICE OF MEMPHIS STATE 
UNIVERSITY. THIS PROJECT IS "AN ORAL HISTORY OF TENNESSEE 
VALLEY AUTHORITY." THE INTERVIEW IS WITH MR. KENNETH D. 
HATCHER. THE DATE IS AUGUST 5, 1974. THE PLACE IS KNOXVILLE, 
TENNESSEE. THE INTERVIEW IS BY DR. CHARLES W. CRAWFORD/ 
DIRECTOR OF THE ORAL HISTORY RESEARCH OFFICE OF MEMPHIS STATE 
UNIVERSITY. TRANSCRIBED BY BETTY WILLIAMS. INTERVIEW #11. 

DR. CRAWFORD: Mr. Hatcher/ let's deal with the period 

of employment after you returned to 
Knoxville from Chattanooga. You were an assistant to the Chief/ 
I believe. 
MR. HATCHER: For about the first two years after I 

returned to Knoxville I was classified 
as a staff accountant on the Comptroller's staff. I worked 
with the three sections of the comptroller's staff--the reports 
section/ account classification staff--and the accounting pro- 
cedures staff during that period/ orienting myself and learning 
about the operations of those three staffs. After two years I 
became an assistant to the Comptroller and responsible for the 
work of those three staffs. 
DR. CRAWFORD: Why were you asked to return to Knoxville 

to work with the Comptroller? 
MR. HATCHER: I think the Comptroller had been impressed 

with my academic record perhaps and 
apparently he was also satisfied with my progress and my work 



with TVA at that point. 

DR. CRAWFORD: Who was the Comptroller at the time 

you returned? 
MR. HATCHER: Mr. Gifford Cruze/ C-R-U-Z-E. 

DR. CRAWFORD: How did your work differ after your 

return to Knoxville from Chattanooga? 
MR. HATCHER: Well/ it was quite different. The work 

in Chattanooga was related to only one 
aspect of TVA accounting and that being accounting for fixed 
assets or plant. On the other hand when I returned to Knoxville 
the work embodied all of TVA's operations and all its programs 
and all of the financial transactions that went into the 
operating TVA and the accounting for those transactions. 
DR. CRAWFORD: TVA was issuing bonds, I believe, by 

that time, wasn't it? 
MR. HATCHER: It was beginning to get into the issuance 

of bonds. The first bond issue was 
actually in 1961. Quite a bit of my early work as a staff 
accountant had to do with reviewing our early drafts of 
prospectuses as they are called in TVA, official statements 
for the initial issuance of TVA power bonds. 
DR. CRAWFORD: Did you work with the first bond issue 

that TVA had? 
MR. HATCHER: Yes, I did. 

DR. CRAWFORD: What was the budgetary situation when 

you returned in 1959? I believe that 
was one of the later years of the Eisenhower Administration. 



MR. HATCHER: That is correct. The '59 fiscal year 

budget would have been prepared under 
the Eisenhower administration. I'll improve the record at this 
point. I believe that we were being restricted as to our 
capital expenditures by the Eisenhower administration for some 
time prior to this time even. [This was] policy which was 
referred to as the "No New Start" policy which had been imple- 
mented in TVA by no appropriations being made for new projects. 
TVA had been able to add generating units at existing projects/ 
but largely with money which had been internally generated 
within TVA rather than through appropriations. 
DR. CRAWFORD: How had the money been internally 

generated? 
MR. HATCHER: Through the sale of electrical energy — 

power revenues. 
DR. CRAWFORD: Your charges for power were still 

relatively low/ but you did make enough 
to add units to existing sites for power? 
MR. HATCHER: Yes/ TVA had had a policy of a return 

on the investment in the power program 
at a level of about 4%. That is not to say that level had been 
achieved in all the years/ but that was the goal. That return/ 
although at the low level of something shortly under 4%, plus 
the funds which were provided through depreciation charges made 
a cash resource available for investment in capital improvements 
which was significant. 



DR. CRAWFORD: So that accounted for your building 

during the late fifties? 
MR. HATCHER: Correct. Quite a bit of our building 

during those years/ particularly with 
the additional units installed at existing projects/ was 
financed through these internally generated monies. 
DR. CRAWFORD: Did you deal with the Bureau of the 

Budget? Did you prepare any reports 
for them? 
MR. HATCHER: Yes, some of our accounting reports were 

utilized for that purpose/ although the 
direct contacts with the Bureau of the Budget/ were made and 
continued through the Budget Office in the General Manager's 
Office. 
DR. CRAWFORD: Was the Budget Office separated from 

the Comptroller at that time? 
MR. HATCHER: Yes, it was.. 

DR. CRAWFORD: When had that happened? 

MR. HATCHER: This occurred/ I believe/ in 1937 when 

the reorganization took place in TVA. 
In the early years the three directors of TVA took a direct 
involvement in the administration of TVA's various programs. 
Mr. Lilienthal/ for example/ was directly involved in the 
operation of the power program. Dr. Arthur Morgan was very 
much involved in the engineering and construction aspect of 
TVA's early activities. Dr. Harcourt Morgan was very much 
interested in the agricultural and conservation programs of TVA. 



This direct involvement created some difficulties. About 
1937 the reorganization took place which left in the Board of 
Directors a policy-making capacity/ but set up in the creation 
of the General Manager's Office the chief administrative role 
in TVA. The implementation policy adopted by the directors 
then was carried out through the General Manager's Office from 
that time forward. 

At the time of that reorganization/ the budget activities 
was transferred from the Division of Finance to the General 
Manager's Office in recognition of the very important manage- 
ment tool that budgeting provided. 
DR. CRAWFORD: How were relations managed between 

the Budget Department and the General 
Manager's Office and the Comptroller's Office. 
MR. HATCHER: Well/ of course/ this is a very vital 

area for close relationships. The 
accounting classification is very closely followed — the 
classifications which were used for budgeting purposes. A 
very close informal relationship had existed from the very 
beginning between the Budget Office and the General Manager's 
Office and the Division of Finance. Almost daily formal 
discussions were held between various parts of these two units 
in the division. 
DR. CRAWFORD: Were both headquartered in the New 

Sprankle Building? 
MR. HATCHER: No. The Division of Finance in Knoxville 

was actually located in the old post 



office building from almost TVA ' s inception. The budget 
activities/ while the Budget Office was a part of the Division 
of Finance/ were located in that same building. When they 
became a part of the General Manager's Office/ they were moved 
to the New Sprankle Building — the budget activities/ I mean. 
DR. CRAWFORD: Did the volume of your work vary through- 

out the year? 
MR. HATCHER: It was fairly uniform except at the end 

of the fiscal year there was a flurry/ 
especially in reporting activities. The months of July and 
August perhaps had a busier requirement of work than did the 
other months. 
DR. CRAWFORD: What budget f luctulations did you have 

through the 1960s? Did your budgets 
generally increase during that time? 
MR. HATCHER: When you speak of budgets, I think you 

have to remember that TVA really had 
three budgets — an appropriation budget/ that is for monies to 
be appropriated by Congress— a power revenue budget and that 
is for the monies which were generated by the sales of electrical 
power — finally/ there are some revenues generated by some other 
programs in TVA/ principally from the sales of fertilizer 
produced in our Fertilizer Munitions Development Program. As 
a total of these three budgets/ the budgets did increase from 
'61 through the sixties. I will have to refresh my memory 
exactly how the different segments of budget increased. I can 
say offhand that the power revenues budget increased successively 



throughout the sixties. 

As to the non-power and appropriations budget/ I would 
have to refresh my memory as to those, but I believe they 
continued at a somewhat stable level perhaps with small increases. 
DR. CRAWFORD: What income did TVA have other than from 

the non-power budget or the agricultural 
fertilizer sales? 
MR. HATCHER: Nothing of any real significance 

although there are some small revenues 
realized from the operation of the reservoir lands. For example, 
timber sales, licensing of tracts for agricultural purposes, 
and miscellaneous other sources that produce small revenues. 
By far the non-power revenues of any significance are those 
from sales of fertilizer. 
DR. CRAWFORD: It's enough to require a good deal of 

bookkeeping, I suppose? 
MR. HATCHER: Yes. 

DR. CRAWFORD: Did fertilizer sales increase through 

this time? 
MR. HATCHER: Again, I would have to refresh my 

memory. I believe my recollection 
would be that they remained fairly stable or perhaps declined 
somewhat during that period. TVA, as you know, in its production 
of fertilizer operates on an experimental basis. Once it 
develops a new fertilizer and that fertilizer is accepted on a 
national basis it pretty well becomes commercial and TVA 
drops out of the production of that particular fertilizer. 



DR. CRAWFORD: Then they experiment with new ones? 

MR. HATCHER: This is correct. TVA ' s development of 

ammonium nitrate fertilizers have per- 
haps been the most productive in terms of revenues from the sale 
of fertilizers. The ammonium nitrate fertilizers perhaps in 
the early sixties were increasing/ but toward the latter part 
of the sixties it pretty well had been accepted and adopted 
by commercial fertilizer companies. My recollection would be 
that sales of fertilizers were declining somewhat in the latter 
part of the sixties particularly. 
DR. CRAWFORD: Do you remember about the Congressional 

appropriation budget? Did that generally 
increase during the sixties? 
MR. HATCHER: This is an area that I would want to 

refresh my memory before going on the 
record about. And I certainly will improve the record at this 
point. I believe that there might have been some small increases 
from the appropriation budgets/ but they remained fairly stable 
throughout that period. 
DR. CRAWFORD: I think with not a great deal of change 

through the sixties. Of course/ in the 
1960s we had the administrations of Presidents Kennedy/ Johnson 
and Nixon. Do you have any impressions about the level of 
budget support for TVA under these various presidents? Not 
necessarily figures. 






MR. HATCHER: Yes, I think I have already described 

the "No-Starts" policy of the Eisenhower 



administration and certainly implied that there were some 
appropriation budget restrictions during that period. I be- 
lieve that during the Kennedy administration that TVA ' s hopes 
were certainly stronger for a more liberal appropriation budget 
concept. I think TVA did venture into some new non-power 
programs coincident with the new Kennedy administration — some 
liberalized programs. I believe this continued on through the 
Johnson administration. In fact, I think it continued in the 
Nixon administration. 
DR. CRAWFORD: Do you remember when you started the 

Land Between the Lakes area? 
MR. HATCHER: I don't know whether I can exactly 

pinpoint the date. It was somewhere 
about '64 or '65 that work in this area was begun. 
DR. CRAWFORD: Did it make a significant budgetary 

change in TVA? 
MR. HATCHER: Yes, there was quite a large scale land 

acquisition program in connection with 
the Land Between the Lakes which was reminiscent of the early 
dam construction period of TVA when large land areas had to be 
acquired for reservoir purposes. I am sure that the novel Land 
Between the Lakes program did result in some small increases 
in the appropriation budget during the period of those 
acquisitions. 
DR. CRAWFORD: Was there talk of any other projects 

similar to the Land Between the Lakes 
that you knew about? 



10 



MR. HATCHER: I don't know of any project which could 

be described as similar as the Land 
Between the Lakes. As a matter of fact/ I don't know whether 
there is a project anywhere that could be described as similar 
to the Land Between the Lakes. Land Between the Lakes is a 
rather unique project! 
DR. CRAWFORD: I don't know of any other at all. 

When you became Comptroller in 1971, 
did your work change in any way? I know you had been working 
closely with the office before. 
MR. HATCHER: NO/ not a great deal. I think my 

decision-making role changed at that 
time. Before that time I had been able to pass that responsi- 
bility for making final decisions on to the Comptroller. After 
I became Comptroller/ of course/ it was my responsibility to 
make those final decisions. 
DR. CRAWFORD: Now/ people pass them on to you/ I 

suppose? (Laughter) 
MR. HATCHER: Yes, I have received quite a number of 

requests for decisions. 
DR. CRAWFORD: Did you have equally good record-keeping 

and reporting from all the divisions 
of TVA? 
MR. HATCHER: That's a hard question to answer. The 

answer of which would be somewhat 
subjective. I'll admit to bias before I state that I believe 



11 



that the records in our Planned Accounting Branch are perhaps 
more complete so that outside accountants could follow the 
records better than are the records kept in our other accounting 
offices. This is not to criticize the work in the other account- 
ing offices because in relation to accounting records these 
items as observed in private enterprise I believe the records 
in the other accounting offices are fairly complete. 
DR. CRAWFORD: Did you have uniform procedures 

throughout TVA? 
MR. HATCHER: Not absolutely uniform/ but consistent 

in principle and governed by accounting 
procedure staff and the accounting classification staff in the 
Comptroller's Office in Knoxville. The various accounting 
branches could modify to their own particular needs the 
principles which were followed for accounting. 
DR. CRAWFORD: You had people auditing the records of 

all the branches/ I suppose? 
MR. HATCHER: TVA is probably one of the most audited 

agencies to be found anywhere in the 
federal government. We do have within TVA an internal revenue 
section which comprised some sixteen to twenty academically 
well qualified accountants who do site audits very comparable 
to the audit work performed by a public accountant firm. In 
addition to that audit TVA, since the enactment of Self- 
financing Amendment in 1959/ has hired a firm of independent 
public accountants — a national firm — for annual audits not only 
its power activities but for all its program activities. It 



12 



has received annually a short form certificate as to the fair- 
ness of its records from that firm in addition to the national 
independent firm. The General Accounting Office conducts an 
annual examination of TVA ■ s accounting records and produces a 
report thereof. So TVA does have quite a complete auditing 
review of all its activities. 
DR. CRAWFORD: I suppose that none of these audit 

groups — the general accounting office 
or the private firms — have any difficulty following your records? 
MR. HATCHER: No sir. Indeed, the general accounting 

office has been quite lavish in its 
praise of TVA's accounting records. The national firm has also 
been quite complimentary in its comments regarding the adequacy 
of TVA accounting records. 

DR. CRAWFORD: What national firm have you used? 

MR. HATCHER: The firm is now known as Cooper's and 

Lybrand. Prior to April of 1973 it was 
known as Lybrand/ Ross, Brothers and Younger. 
DR. CRAWFORD: Where is it headquartered? 

MR. HATCHER: New York City. 

DR. CRAWFORD: What did you do to maintain the quality 

of your staff? What sort of people did 
you tend to recruit? 
MR. HATCHER: We have attempted to recruit largely 

through the Internal Audit Section that 
I mentioned before as a beginning ground. Young college graduates 
with a good academic background in accounting majors — good 



13 



performance in their academic records. 

DR. CRAWFORD: Have you tried to recruit them from 

any particular schools or parts of 
the country? 
MR. HATCHER: College recruitment is handled by TVA 

by the Division of Personnel and it has 
a college recruiting section. Their activities extend to colleges 
throughout the country. There has been some concentration in 
the Southeastern area/ I think, and particularly in black colleges 
DR. CRAWFORD: Were you always satisfied with the 

personnel that they secured for you? 
MR. HATCHER: Yes, I think it would be fair to say 

that they have done a good job in pro- 
viding us with new qualified personnel. 
DR. CRAWFORD: How large was the section when you 

became Comptroller? 
MR. HATCHER: I believe there were eighteen persons 

in the section at the time when I took 
over. 1*11 verify that for the record. 
DR. CRAWFORD: You knew all of them at that time/ 

having worked with them? 
MR. HATCHER: Some of the younger employees I had not 

actually worked with. I have tried to 
maintain at least an acquaintance with the internal audit 
section. As I have indicated since/ we do use this as a 
recruiting area for key positions throughout the division. Of 
course/ I have kept in touch somewhat with the performance of 



14 



the different individuals in that section through their 

supervisors . 

DR. CRAWFORD: You were likely to know then who the 

capable workers were? 
MR. HATCHER: Yes. 

DR. CRAWFORD: The policy of TVA in filling key 

positions has usually been promotion 
from within rather than bringing in people from outside. Do 
you follow this policy? 
MR. HATCHER: I can only speak for the Division of 

Finance with respect to that/ but that 
has certainly been its policy. 
DR. CRAWFORD: You have usually thus been able to have 

people in positions who understood the 
purposes of TVA and had been supporting them for a period of 
time. Did you feel that you had a good degree of support of 
TVA ' s philosophies in programs from your staff? 
MR. HATCHER: I think the matter of support of TVA 

and its policy is perhaps secondary to 
the solid performance in accounting proficiency/ but largely 
speaking our employees have supported TVA policy. We have 
had no notable divergence or dissidence to that policy. 
DR. CRAWFORD: Have your staff members generally 

belonged to professional accounting 
associations and kept up with the profession? 
MR. HATCHER: Our professional people have. 

DR. CRAWFORD: Are they encouraged to do that? 



15 



MR. HATCHER: Yes, they are. 

DR. CRAWFORD: Do they usually attend accounting 

meetings or conventions? 
MR. HATCHER: Yes/ particularly at the local chapter 

level . 
DR. CRAWFORD: Did you encourage additional education 

and training for them? 
MR. HATCHER: Yes. 

DR. CRAWFORD: That would be reasonable considering 

your experience with the University of 
Tennessee. At the time of your retirement what impressions did 
you have of the effectiveness of TVA? I know many people 
doubted it at the beginning. And you indicated that you 
might have had some doubts at a very early period. 
MR. HATCHER: Yes/ I think the idea was quite strong 

in the early years that TVA was a 
temporary organization. By the time that I retired in 1974 
however, all ideas about TVA being a temporary organization had 
been completely dispelled. TVA is almost universally accepted 
as a solid organization which is making a real contribution to 
the public interest. 
DR. CRAWFORD: Of all the work you did for TVA, Mr. 

Hatcher/ what did you find most 
interesting? 
MR. HATCHER: Well, it might be somewhat anomalous 

in view of what I have already described 
as a desire to get out of the travel of the internal audit 



16 



section. I think I completely enjoyed my work in the internal 
audit section and my visits to the various accounting units 
throughout TVA probably as much as any work that I have actually 
done in TVA. I would very quickly add that I enjoyed all my 
work for TVA very, very much. I think if I had to single out 
one phase of it that I enjoyed the most it would probably be 
my internal audit work. 
DR. CRAWFORD: What condition do you feel you had in 

the Comptroller's Office at the time 
you left? Are there any major programs or things that you 
hope to do that you still have under way? 
MR. HATCHER: Yes, there are some reorganizations 

which are under way within the Division 
of Finance and outside the Division of Finance actually and 
involving other divisions which will have a significant effect 
upon the Division of Finance. These have been considered for 
some time and implementation has actually started on some of 
these steps. For example, the centralization of voucher 
preparation activities into the Division of Finance is now 
separated between the Division of Finance and the Division 
of Construction. 

The examination of the possibility and feasibility of 
combining other areas of the Division of Construction account- 
ing branch with the Division of Finance are under way. There 
is a strong possibility, I think it is fair to say, that the 
activities of the accounting branch in the Division of 
Construction might be transferred to the Division of Finance. 



17 



These are some of the things I had envisioned for some time 
which were in various stages of implementation as I left the 
Comptroller's Office. 

My short tenure as Comptroller--almost exactly three 
years — was devoted to two things: One/ was to establish a 
more aggressive concept in the Division of Finance and to 
create an organization which would exercise more initiative 
in furnishing information vitally needed by management in 
which perhaps has been abrogated by the Division of Finance 
to operating organizations. 

The second was to bring along some young promising 
accountants in the division who could accept roles of leader- 
ship in bringing about the new ; I hesitate to describe it as 
aggressive/ who would take more initiative in the viable 
accounting activities of the division to produce more meaningful 
records for the operating managers. 
DR. CRAWFORD: Do you feel you have made a start 

towards those goals? 
MR. HATCHER: Yes, I do. 

DR. CRAWFORD: I know you are not in touch directly, 

but do you feel that you have seen 
things developing after you left TVA? 
MR. HATCHER: I think they are continuing to develop, 

yes. I have every hope and anticipation 
that they will continue. 
DR. CRAWFORD: is there anything else about your TVA 

experience that you would like to 
cover, Mr. Hatcher? 



18 



MR. HATCHER: I can't really think of anything right 

now/ Dr. Crawford. I came to this 
meeting without any idea what our interview might cover. I 
hadn't given any thought what might be covered. I'd like to 
think about this a little. In my review if I find I have 
omitted anything, I'll certainly supply it for the record. 
DR. CRAWFORD: That will be fine. 






ECKMAN 

NDERY INC. 

g^ AUG 88 

t=|§K N. MANCHESTER, 
s=^ INDIANA 46962